The Blair project cracks

LINDSEY GERMAN

Whatever Labour supporters thought they were voting for on 1 May 1997, they believed they were rejecting Tory policies. They wanted no more privatisation, better public services, greater job security. They wanted an end to the influence of sleazy businessmen, a halt to the MPs who listened to professional lobbyists rather than their constituents, and a greater say in decision making. They wanted to stop the vested interests, from country landowners to giant supermarkets, dictating what working people should do. Nearly half way through the term of a landslide Labour government, none of these wishes has been achieved. Tony Blair's Labour government is noted more for its conservatism than its radicalism. All those who most identified with Labour's aspirations—-for greater equality and fairness, for a curbing of the bosses' worst excesses, for ending the worst poverty in generations-—now find themselves disappointed at the lack of change. Those traditionally most hostile to Labour-—big business, the press, the champions of free enterprise—-are pleasantly surprised that their wealth and power have been left untouched and that New Labour will do anything to appease 'enterprise' and the 'free market'.

The contradiction between what people expected and what they have received has led to a political and ideological crisis among Labour supporters. Some of it takes the form of bitter humour, as in the letter to The Guardian which suggested that the campaign song for the next election should be 'Things Can Only Get Better'. But increasingly it takes the form of protest and argument. People are leaving Labour, not joining it. Many longstanding activists are saying they will not stand as councillors or canvass for the party in this year's elections. Some are even tearing up their cards. The enthusiasm which greeted Blair's election only two years ago seems a distant memory. No one plays the best selling election night video any more and few remember the excitement of seeing the old sleaze ridden, arrogant Tories thrown out by an electorate which had been waiting impatiently for the chance. Even Marxism Today, the champion of Thatcherism on the left during the 1980s, has found Blair too much to stand.1 The reasons are not hard to see. Under Tony Blair's government it has increasingly been like the old days under the Tories. In the few months since December 1998 alone there has been a severe NHS crisis, with patients lying on trolleys or travelling across country to find beds, a war in the Gulf, with Britain playing the role of uncritical supporter of the US, and a sleaze scandal which went to the heart of government and forced two ministers to resign. This was presided over by a Labour government whose prime minister staked his reputation on being untainted with the old political scandals and incompetence of the previous 18 years of Tory rule.

On the eve of election day, 1 May 1997, Tony Blair told his Sedgefield constituents that people had to use the next 24 hours to ensure that when they woke up on 2 May they were not confronted with another five years of the 'most discredited and sleazy government...it is 24 hours to save our NHS, 24 hours to give our children the education that they need, 24 hours to give hope to our young people, security to our elderly'.2

Many of those who voted for him could be forgiven for thinking that little has changed. There have been no perceptible improvements in hospitals, schools or public transport. In many areas they have deteriorated. The public sector workforce suffers widespread demoralisation through low pay and worsening conditions. Teachers have been subject to an ideological assault as vicious as anything under the Tories. Blamed for 'failing schools' and 'low standards', they are now facing business intervention in schools and still have to suffer under the hated Ofsted inspection regime headed by Chris Woodhead, reappointed under Labour on a much higher salary. Privatisation is being introduced into hospitals. The privatised rail bosses can ignore a crescendo of complaints with impunity, safe in the knowledge that their profits will never be seriously threatened by the government.

Some of the poorest people in Britain have found themselves under threat: old people are expected to live on the lowest pensions of any advanced capitalist country, while single parents have been the victims of scapegoating and planned benefit cuts. Council houses are being sold off to private landlords, leaving tenants with less security of tenure and higher rents. Students are faced with fees of £1,000 a year to go through higher education; the disabled and sick are having to undertake more stringent tests to qualify for benefit; and all workers are being told they will have to pay more for their future pensions. Those who want to join a trade union to improve their conditions will find that they have won far fewer concessions than the bosses from Labour's proposed employment law.

Labour has shown itself unwilling or unable to stand up to the rich and powerful. There has been no freedom of information act, food regulation proposals have been toned down to appease the big supermarkets, green traffic laws to restrict car usage have been delayed until the next parliament, and the ban on foxhunting has been abandoned. The 'right to roam' law has been subject to a similar fate under pressure from some of the most right wing people in Britain, the country landowners.

Blair justifies his policies by reference to a Third Way between right and left in politics. Both traditional poles have failed-—state socialism was a disaster and neo-liberalism in economics has also brought the excesses of the market. Now Labour can position itself to the right of traditional social democracy (as represented by Old Labour) and to the right of the social democratic leaders in Europe, such as Lionel Jospin in France and Gerhard Schröder in Germany. In a recent speech Blair spelt out what the Third Way meant in terms of a centre-left consensus: that human capital matters more to economic success than money or equipment; that markets work best but need regulation; that the foundation of the modern welfare state is work for those who can and security for those who cannot; that how a government spends money and what it funds are as important as how much it spends; that a strong civic society rests on responsibilities as well as rights; and that political power should be devolved to the lowest possible level.3 The theory of the Third Way underpins the policies which his government is pushing through and which are bringing Blair and New Labour into repeated collisions with its own members, its voters and many trade unionists. That is why, in every major area of government policy, the contradictions are becoming sharper and more problematic for Blair.

The legacy

The stock response of the Blair government to any criticism is that it takes time to repair the damage caused by 18 years of Thatcher rule. Labour voters will have to wait patiently while there are small incremental improvements in areas such as schools and hospitals and nothing can be promised until the economy is in sufficiently good shape to allow it. But the legacy of cuts and devastation caused by 18 years of Tory rule (and the Callaghan Labour government which preceded the Tories from 1976 to 1979) have left many areas of society in a terrible state. Indeed, Britain has become a land of extremes, statistically speaking. Both poverty and inequality have grown dramatically. Tax changes between 1985 and 1995 have led directly to the poorest tenth of the population being 4 percent worse off, while the richest tenth are 6 percent better off.4 Direct tax rates as a percentage of gross domestic product in Britain are lower than in any other EU country except Portugal.5 Between 1979 and 1995 in Britain the gap between top and bottom earnings widened by more than one third. This mirrored the growing gap in the US and New Zealand, while Japan and most Western European countries saw the differential remain more or less the same.6 Whereas for most of the postwar period the incomes of those at different levels rose at more or less the same rate, between 1979 and 1995 this changed. Higher incomes rose much faster, with that of the richest tenth rising by 68 percent and that of the poorest tenth actually falling by 8 percent.7 No wonder that by the early 1990s there were two and a half times as many people in poverty as there were in 1979.8

This stark worsening of inequality and poverty has been matched with a deterioration of public services in virtually every area. The percentage of GDP spent on health is one of the lowest in the advanced capitalist world.9 Public transport has less money devoted to it in terms of population than virtually anywhere else in Western Europe. Expenditure on rail infrastructure per head is lower than Portugal or Spain; public transport fares in London are the highest of any European capital; fewer people use public transport than in other European countries.10 Creeping privatisation in areas such as care of the elderly means that places in council residential homes and NHS hospitals have been cut by more than a third since the late 1970s; at the same time the number of private residential homes trebled and those in private hospitals and nursing homes have increased by five times.11

It is obvious that radical remedies rather than gradual reforms are needed in order to make a significant impact on these problems. Instead, Labour imitates the previous Tory policies which have proved disastrous. There is no commitment to renationalisation; public spending is being kept to previous Tory limits for the first two years of government; projects such as the modernisation of the London tube or building new hospitals are to rely on private finance; and higher taxes are not even contemplated as a means of rectifying the situation. The Blair government has prided itself on the levels of approval received from big business and the caution it has shown in altering previous government policies. The reason lies in its determination to avoid what it sees as the mistakes of past Labour governments and to follow a precise plan of government action. In practice, however, Labour has bowed to its traditional enemies in the media, big business and the middle classes. It has appointed Tories to many public positions, including overseeing reform of the House of Lords. In the process it has assured such people—-many of whom would never have voted Labour-—that they have nothing to fear.

At the same time Blair has alienated many of his traditional supporters by attacking all the beliefs that 'Old Labour' held dear-—from comprehensive education to an NHS free at the point of use. Blair's central assumption, that getting the economy right and allowing free rein to businessmen to 'create wealth' will solve all his other problems, is increasingly prone to criticism.

Beyond boom and bust?

The Blairites always had a model for how they would run government. Drawing heavily on the successful Clinton election campaign in the US in 1992, New Labour believed it could build a successful government, running for at least two terms, which would move Labour firmly onto the centre ground of British politics and finish the Labour left (the main Blairite enemy) forever. Some of the strategy for this was frankly ridiculous. Blair's election campaign was, following Clinton, based on the profound messages: 'time for change; the failure of Bush (Major); Clinton (Blair) is young and dynamic; we offer a partnership between government and people'.12 But the most enduring message that the Clinton campaign gave to the Blairites was its famous catchphrase, 'It's the economy, stupid'—-once you get the economy right then everything else follows. Blair and his chancellor, Gordon Brown, have always taken economic success as their touchstone. Every policy proposed by Labour was 'costed' before the election; every proposal for spending has been accompanied with the proviso that it can only be achieved when the money is there. But Blair and Brown have proved themselves to be much more than simply careful keepers of the Treasury purse; their ideological commitments dictate that they embrace such methods, extend them into as many areas of public spending as they can, and make sure that they obey the wishes of the businessmen whom they admire so much.

Some of this is very Old Labour indeed—-it goes back to the days of Ramsay MacDonald and his chancellor Philip Snowden in 1931, when the Labour government's commitment to following orthodox economic policies led to wage and benefit cuts and a split inside Labour as MacDonald formed a government with the Tories. But Blair and Brown's strategy is dressed up in a rejection of Old Labour 'Keynesian' methods, which in turn is justified by the increasingly global nature of capitalism. Capital is no longer anchored down or tied to nation states, the argument runs, and so there can be no regulation of capital by governments or other forms of state intervention. All that governments can do is create skilled and educated workforces, prepared to work flexibly to suit the demands of global capital, which can only be subject to minimal controls or regulation-—for example, a minimum wage, but one set at a sufficiently low rate so as not to deter capital. Tax and wage rates have to be 'competitive' in order to attract investment; hence the boast that corporation tax is one of the lowest in the world and the refusal to consider raising the very low rates of tax on higher earners. Wages and conditions for British workers are some of the lowest of the Western European countries, and the Blair government has consistently refused to raise them to match those of German or French workers.

This strategy demands an almost total acceptance of the workings of the free market. If workers accept low enough wages they will see unemployment falling. The only way to prevent factory closures is for the workforce to be sufficiently flexible that the company does not move abroad. The excessively long working hours of most British workers, which became commonplace under Thatcher and Major, have to be accepted in the name of flexibility.13 The answer to those forced to exist on low benefits is that they should go back to work. Since he became Labour leader, Blair has consistently followed this line of argument. Indeed, as his leadership progressed he increasingly came to publicly favour the 'Anglo-American' completely deregulated model of capitalism against the 'Rhineland' model with its greater employers' costs and more regulated system of employment. The logic of following the markets meant heaping praise on the Asian Tigers, seen until the economic crisis there during 1997 as the fastest growing and most successful economies in the world, and praising the epitome of deregulated capitalism, Rupert Murdoch. Blair even travelled to Australia to address a conference of NewsCorp Murdoch executives in 1995.

During his election campaign, Blair went out of his way to appease big business-—an opening election broadcast featured Terence Conran, Gerry Robinson and Anita Roddick.14 He spoke at the Corn Exchange in the City of London on 7 April 1997 where, although he called for a Third Way between laissez faire capitalism and state control, in practice this meant tax cuts, flexible labour markets and an assumption that 'economic activity is best left to the private sector' and the 'postwar Keynesian dream is well and truly buried.' Days later he stressed, in a business manifesto, an inflation target of 2.5 percent, tough rules on borrowing and spending, public-private finance for transport, and education improvement to increase skills. A letter to The Times by 84 businessmen stated that business could 'look forward with confidence to a profitable future with a Labour government'.15

The economic rectitude continued after the election, with Gordon Brown promising that public spending would remain within the narrow limits laid down by the Tories for the next two years. Spending could not be financed through higher taxation but only through real growth and expansion of the economy, which alone would allow better health, education and transport. There was one fatal flaw in the argument: if the economy failed to expand then public spending would be slashed further, more people would become unemployed and would have to exist on inadequate benefits, there would be no room for improvement in living standards. Brown dealt with this by boasting that Britain would be able to turn its back on boom and bust-—an easy boast since Labour took office when the economy was growing, unemployment was relatively low and expansion of public spending looked a possibility after the two years of strict Tory spending controls. However, it became clear throughout 1998 and in early 1999 that avoidance of bust would be no easy matter.

There was, first of all, the recession and economic crisis already hitting so much of the world economy. At first it was commonplace among Western economists and politicians to assume that the severe financial, economic and social crises which devastated several of the Asian Tigers from mid-1997 onwards would not affect the Western economies. They saw huge devaluations in countries such as Thailand and Indonesia, and the collapse of banks and financial institutions in countries as important economically as Japan, but believed that 'the contagion' could be contained. This changed in August 1998 with the collapse of the Russian economy, which led to massive losses against a devalued rouble, when even the billionaire speculator George Soros could see that all was not rosy for the future of capitalism.16 Catastrophe beckoned again following the near demise of the hedge fund Long Term Capital Management, which nearly caused a collapse on Wall Street and did for a time herald a 'flight to cash' as investors even shied away from government bonds, believing that the markets were going haywire. The devaluation of the Brazilian currency, the real, in early 1999 upset temporarily stabilised money markets and once again raised prospects of world recession. There is still debate about whether the whole world will enter recession, or whether the US and parts of Western Europe will escape it. But already between a third and two fifths of the world are in recession; the world's second largest economy, Japan, is in deep and seemingly intractable crisis and there are signs of slowdown in the US economy.17

There is general agreement that the British economy, for once in a favourable situation when a Labour government took office, is heading towards recession. There is still disagreement about how bad this will be.18 Towards the end of 1998 there was much anecdotal evidence of a serious recession: decline of manufacturing output, the beginning of signs of recession in services, and an apparently catastrophic slump in many areas of consumer spending. Although the fall in levels of unemployment recorded early in 1999 led some to believe that a recession could be avoided, this seems unlikely. Economic growth is slowing down: 'The economy has slowed to a crawl. Government statisticians say that the economy grew by only 0.2 percent in the last quarter of 1998...some economists expect it to be revised to an even lower figure later. Most forecasters expect paltry growth in the first half of this year'.19 The article continues, 'Most economists think Mr Brown's forecast of 1 percent growth this year is too rosy'.20 Whether the economy manages a 'soft landing' or whether the recession is much harder, the squeeze on delivering the public services which Gordon Brown insists can only be achieved by getting the economy right will be much more severe. Brown is committed to a golden rule that current spending cannot exceed tax revenues over the business cycle. With a recession, more will be spent in areas such as welfare benefits and less will be received in tax revenues. Although the Treasury hopes that this will even itself out over the cycle—-that downturn in the economy will be followed relatively quickly by upturn which will reverse this process—-there is no certainty that this will happen, thus leading to the Blair government holding down or cutting public spending further.

Blair also faces a dilemma over entry into the euro. He is caught between pressure from the majority of the capitalist class who clearly want Britain to enter sooner rather than later, and the Murdoch press which is opposed and which so far Blair has avoided antagonising. The pressure on him to hold a referendum quickly will grow, since he is now being criticised by big business for not joining straight after the election. Either way, he risks unpopularity since public opinion is still against the single currency and Blair may find himself under much greater attack from both sides.

New Labour, new means tests

While Labour refuses to intervene to regulate the economy or to curb the excesses of big business, it has no such qualms about intervening to direct the lives of individuals. Blair and Brown's determination to abide by a degree of financial rectitude is matched by a level of social authoritarianism with regard to welfare which apes the policies of their Tory predecessors but manages a degree of sanctimoniousness which goes beyond what even many Tories would have dared. Whether in praise of adoption for children born outside marriage or opposing parents who take their children on holiday in term time, Labour ministers are never short of a quote about parental responsibility. There are constant attempts to police the family, council estates and schools. This attitude marks a move away from society taking collective responsibility for social problems and towards individuals themselves carrying a much greater burden. It is not a new development: the long term trend since the Callaghan government of the late 1970s has been to shift the burden of care away from the state and towards individuals. There has been a huge shift away from state and towards private care for the elderly; council housing has been progressively privatised, at first piecemeal, but now in huge blocks of housing stock, and in the process the subsidy on housing has moved from bricks and mortar to effectively paying private landlords; the costs of education and healthcare have been stealthily pushed onto the individual through payment for 'extra curricular' activities in schools, tuition fees and loans for students, and charges for eye tests, dentistry and prescriptions. But now working people suffering from these cuts in public services are also blamed for their problems.

The accompanying talk of 'rights and responsibilities' claims that rewards in society come from taking a responsible part in society. Blair draws heavily on the ideas of community and social justice but his use of the terms do not imply an egalitarian philosophy. Rather they suggest one where the solutions to problems rest very much with the individual rather than with society as a whole. In this, they represent a return to Victorian liberalism: if, despite the state's efforts, people remain unemployed, then this is their own fault and reflects their own inadequacies. Since individuals are therefore responsible for their own unemployment, punitive measures are justified. The attempt at an ideological justification for such policies involves a rejection of the principles of the universal welfare state established after the Second World War. The principle was that everyone in a position to do so paid tax and national insurance contributions and in return received benefits when they were sick, old or in need of education. In practice this has worked as a 'savings bank'-—the money paid in tends to be received in benefits by the same people (so the young and healthy pay contributions and receive them back when they are old or sick), the majority of welfare benefits therefore being self-financed. Nonetheless, there is an element of redistribution from the richest to the poorest involved in this principle as the richer tend to pay more tax while the poorer tend to receive more benefits. A recent study concludes that if public services were paid for by user charges rather than through taxation, losses to the poorest households would average £5,000 a year while gains to the richest households would average £11,000 a year. The introduction of means tested benefits would only increase benefits traps and disincentives to work.21

Far from helping redistribution the Blairite project on welfare requires abandoning the whole idea. Instead, he wants a system where the vast majority in work pay more, often for private provision, while state benefits remain an inadequate safety net. The tax cuts for the rich instituted under the Tories have been upheld by Labour, on the grounds that people will not pay more taxes (even though there is overwhelming poll evidence to the contrary). Instead a lower tax regime is supposed to be accompanied by higher individual spending on private pensions, on higher education, and if individuals 'choose' to do so on private education and healthcare. The element of compulsion suggested in the plan for second pensions for all British workers is effectively the further partial privatisation of taxation and benefits. Blair rejects the Thatcherite notion that 'there is no such thing as society', but his view of society rests heavily on the individual within it and has a profoundly conservative tinge: 'The only way to rebuild social order and stability is through strong values, socially shared, inculcated through individuals, family, government and the institutions of civil society'.22

The role of individual effort in the context of the family is also stressed in his view that social justice is about effort to improve one's situation rather than changing society so that everyone can be levelled up, summed up in the phrase that Labour should strive not for equality of outcome but for equality of opportunity. This idea puts the burden on individuals not to fail rather than on society not to fail them. It also reinforces the notion that society is made up of a majority of discerning consumers whose lives are one happy round of choosing how to spend their money and who want to pick and choose education or healthcare in the same way as buying a pair of shoes. These public services therefore have to be geared to a series of costly and time wasting tables and standards, rather than seriously trying to raise the standards of public services in all areas and for everyone regardless of 'consumer demand'. And for those unfortunates who do not fit into this model of consumer society, then New Labour has shown itself to be as arrogant, unsympathetic and authoritarian as any previous government.

Neil Kinnock once said of the Tory government: 'I warn you not to get sick. I warn you not to be old.' One could equally warn under this Labour government not to be young and unemployed, or living on a sink estate, or to be old and poor, or to get into trouble with the police. If you are a single mother or sick or disabled and on benefits, then the government pressurises you to get a job. If you live on a poor estate, then the government pressurises you to allow a private landlord to take over. If you are an asylum seeker you will be denied benefits and any means of earning a living, and threatened with harassment and deportation. If you break the law then you can expect zero tolerance. Yet there is no sign that these policies work. Many of them are taken from Blair's hero, Bill Clinton. Yet the US's low levels of unemployment are based on a low wage, deregulated economy which has already created widespread discontent among workers even in a boom. It also contains the highest prison population in the world—-a costly way, both financially and socially, of avoiding welfare. And the abolition of many social welfare benefits there, plus the restriction of many more, will have devastating consequences for millions when unemployment rises.

The centrepiece of government welfare policy is Welfare to Work. In 1994 Gordon Brown spelt out the thinking behind it:

We must look hard at our own welfare system to ensure that it provides pathways out of unemployment and poverty rather than trapping people in persistent dependency. For the risks and insecurities that the welfare state was set up to combat have changed dramatically over 50 years and the welfare state has to keep up with the times. The welfare state must be about supporting people as they respond to these challenges-—extending their choices and opportunities: acting as a trampoline rather than as a safety net.23

The idea of giving people who are at present 'socially excluded' the skills and the motivation to earn a wage and therefore to stop their dependency on the state is central to Welfare to Work. Yet it begs a number of questions. Many people cannot work for reasons of age, health or disability: these people are now condemned to a miserable existence on benefits which barely cover the essentials of life. Many others who are at present on benefits will almost certainly work in the future. This is true statistically of both the young unemployed and of single parents on benefit. Yet Labour is insisting that such people are pressurised or even forced to take work at very low wages which, far from developing their skills, is often the most routine work which cannot attract a stable workforce at normal pay rates. Education is likely to be further disbarred to such people since it now carries very high costs up front in the form of fees and loans, which many people on benefits will see no way of repaying and so will be deterred from such a course. In addition, Welfare to Work has not been an unqualified success in the US or Australia, where it has already been tried. The Australian JET programme cost taxpayers more after five years than it had saved because it involved a subsidy to employers. Existing workers are often displaced by these subsidised workers who have to accept lower wages, so the number of new jobs created has not been particularly high. There are also worries that such schemes do not represent the first rung on a ladder to well paid work, but a revolving door between low skill, low reward jobs and the dole queue. Most importantly, there is no guarantee; the scheme is predicated on an expanding economy-—what if there are no jobs?24

There is no doubt that the government wants to increase the level of compulsion in Welfare to Work. In 1997 Gordon Brown introduced the scheme in his budget by stressing the responsibilities of young unemployed people: 'With these new opportunities for young people come new responsibilities. There will be no fifth option-—to stay at home on full benefit. So when they sign on for benefit they will be signing up for work.' In effect there is little difference between this and the 'Workfare' schemes which Labour has traditionally rejected—-as recently as in 1994 in the Commission on Social Justice—-because of the element of compulsion. But 'if Workfare means certain categories of the unemployed having to work for their benefits, then Welfare to Work is a form of Workfare'.25

Yet this level of authoritarianism has already created a backlash, especially in terms of the proposed compulsion towards single parents or the disabled to find work. Although the government was forced to retreat on its plans to slash benefits in such areas in the wake of major disagreement and protest around the 'welfare roadshows', and although the unpopularity of these measures led directly to the departure of the ministers responsible, Harriet Harman and Frank Field, in July 1998, there are repeated attempts to try to introduce an element of compulsion. This, plus the holding down of benefits to extremely low levels which have a demoralising and harmful effect on claimants, has led to a general sense that New Labour is not prepared to do anything to help some of the poorest and most needy. Indeed, it is more likely to blame them for their problems. This feeling has led to a level of militancy among groups such as pensioners and the disabled which has only grown under Blair's government and which is unlikely to be appeased by any minor changes in policy. Welfare to Work has bred discontent and a degree of cynicism about Labour's shabby treatment of the unemployed, but has yet to generate significant organised protests. The advent of a recession and higher levels of unemployment might change that; it would certainly expose both the harshness and the inadequacy of Labour's welfare policy which relies on market provision.26

Democracy and constitutional change

The manifesto on which Labour was elected in 1997 contained a profound commitment to constitutional change. Scotland and Wales would be allowed a degree of devolution; regions in England would receive more power; there would be elected mayors in London and other cities. Labour was pledged to abolition of voting rights for hereditary peers in the House of Lords, a referendum on electoral reform and a freedom of information law. Government would be more in the control of the people, less corrupt and sleazy, and more locally accessible. Blair sees this area of constitutional politics as very important in delivering what he regards as true democracy and in modernising the British state. While he has introduced legislation to achieve many of these changes, and constitutional change is heralded as a Blairite success story, in reality there have been a number of setbacks and reverses for those wanting such reform. Freedom of information legislation has been put on hold, much to the disgruntlement of many Labour supporters, as has some local government reform. House of Lords reform has become bogged down in compromise. A referendum on changing the voting system to a form of proportional representation has been deferred. Most importantly, the supposed benefits to Labour of Scottish and Welsh devolution and of a London mayor have turned into their opposite, as Blair increasingly acts as someone who believes in democracy as long as everyone agrees with him.

This is most obvious in Scotland and Wales. The theory behind devolution was that it would allow more local accountability. It would also pre-empt calls from the nationalists for complete independence by allowing a degree of local decision making. Despite the failure of the devolution referenda in the late 1970s, this time Labour would organise devolution votes based on a simple voting majority and would be strongly placed to dominate the Scottish Parliament and the Welsh Assembly. At first there was little doubt that Labour would benefit electorally from these changes. The Tories were completely wiped out in May 1997, retaining no seats in either Scotland or Wales. In both, the nationalists were in second place electorally at the general election but neither the Scottish National Party nor Plaid Cymru made an electoral breakthrough: the SNP had around 22 percent share of the vote, only half a percent up on the previous election. In Wales Plaid received just under 10 percent of the vote (an increase of 1 percent) and this was heavily concentrated in the Welsh speaking and rural areas.27

The referenda took place just months after the election, showing a clear majority for a Scottish Parliament and an extremely narrow one—-0.6 percent-—for the Welsh Assembly. However, far from the referenda satisfying demands for greater control in Scotland and Wales, the political result was an increase in support for independence. This was fuelled in Scotland even before the referendum when the Blairites hedged over the question of tax raising powers for the parliament. In the 18 months or so since, however, the Labour Party in Scotland has been under repeated attack and has seen its support fall to the benefit of the SNP. Arguments over the blatant selection of Blairites as candidates for the parliament, while many respected Labour figures were passed over, has led to divisions in the party and a number of defections to the SNP locally. Blairite MP Rosemary McKenna, chair of the selection board, claimed that 'we could not stuff our lists full of second rate hacks and expect Labour voters to express blind loyalty to the party.' In fact the second raters include two MPs, the former secretary to the Scottish party and the former leader of Edinburgh City Council.28

There are already signs of a backlash against this behaviour. Labour has lost a number of council by-elections to the SNP. The veteran Westminster MP Dennis Canavan has been denied a Labour nomination for a Scottish Parliament seat and is now standing as an independent. Labour's continuation of Tory policies has alienated many of its supporters. For example, it has used openly Tory arguments to accuse the SNP of preparing a 'tax bombshell' for Scottish voters. The journalist John Lloyd has complained that devolution has been 'an anti-English project'. But, as Joyce McMillan, writing in The Scotsman, said, the feeling for greater independence has little to do with anti-English sentiment and a lot to do with Blair's policies-—the 'over-enthusiastic endorsement of Margaret Thatcher's "no alternative" approach to market economics, which once again has left Scots of the left with no utopia to dream of except a Scottish one'.29

Although there appeared to be less concern over devolution in Wales, with the very narrow yes vote and the fewer powers devolved to the Welsh Assembly, the rows involving Labour over the assembly have become as sharp as those in Scotland in the run up to elections in May 1999. There was pressure from the Blairites to ensure that Ron Davies, the Secretary of State for Wales, won the nomination as Labour leader of the assembly against the strong challenge of Rhodri Morgan. Morgan, although far from being a left winger, was regarded as unreliable by Blair and with the help of the union block vote was eventually defeated. The nightmare scenario arose after Davies was forced to resign following the 'Clapham Common incident'. Blair's replacement as Welsh secretary was Alun Michael and he insisted that Michael should also lead the assembly. This was seen as the imposition of a London Blairite candidate on Wales and came on top of a series of events which had alienated many Labour voters from Blair. By-elections in council seats earlier in 1998 demonstrated a shift away from Labour in one of its strongest heartlands towards Plaid Cymru, which appeared a more left wing alternative. In summer 1998 Plaid took its first seat on Swansea council for over 20 years and Plaid won a 'safe' Labour seat near Bridgend.30 Support appears to be growing for Plaid not just in its traditional areas but in the industrial valleys of south Wales where Labour is dominant.

Rhodri Morgan's challenge to Alun Michael has led to civil war inside Labour. There is near universal discontent with Michael and with Blair. Had the election been based on one member one vote of the Welsh Labour Party membership, then Morgan would have won hands down. But Blair had to abandon his supposedly favoured method of election and insisted on an electoral college with only one third of the votes going to individual members; trade unions made up another third, and MPs plus some assembly candidates the final third. Even so, the vote was very close and Michael won thanks to the union block vote which delivered for Blair against the wishes of many union members. Blair breathed a sigh of relief when Michael won, but his relief is won at the cost of delivering more votes to Plaid in May and of uproar in the Welsh party. The forced imposition of Michael resulted in an own goal for Blair.

New Labour faces a similar dilemma in London. The idea of an elected mayor and a partly elected quango to run London was a compromise. Abolition of the old Greater London Council under Ken Livingstone was very unpopular, but Blair had no desire to restore a similar body. He would like the mayor to be business friendly and firmly New Labour. Unfortunately for him most Londoners both in and outside the Labour Party think differently. Ken Livingstone is by far the most popular figure for mayor and would be the obvious choice—-except that Blair opposes him. Labour's intention is therefore to exclude him from any shortlist. Yet it is obvious that Livingstone is popular precisely because he represents something to the left of Blair in a city where many local issues such as transport and environment are highly politicised, where the swing to Labour in the 1997 election was higher than the average nationally and where even many of the suburban outer London seats returned Labour MPs. There have been a series of desperate attempts to find Blair--friendly alternatives to Livingstone, so far with little success. The latest signs are that Blair will try to persuade health minister Frank Dobson to stand, on the grounds that he could beat Livingstone in a shortlist election of London party members. But this is a risky strategy-—as in south Wales, it depends on party members voting as Blair wants, and there is no guarantee of this. The alternative is to exclude Livingstone from the shortlist altogether-—the favoured Blair method, but one which contradicts his professions of democracy.

Labour's policy on the House of Lords has undergone progressive erosion under Blair. When he became leader, party policy was the abolition of the existing institution and its replacement with a second elected chamber. This began to change in 1996, when Blair's John Smith Memorial Lecture substituted instead the abolition of the hereditary principle: 'Surely we should first make the House of Lords a genuine body of the distinguished and meritorious-—with a better, more open and independent means of establishing membership—-and then debate how we incorporate democratic accountability'.31 Consequently Labour's manifesto promised to abolish the voting rights of hereditary peers in the House of Lords as 'the first stage in a process of reform to make the House of Lords more democratic and representative'. However, since the revolt of the Tory peers even this has been abandoned. Blair has compromised, allowing 91 hereditaries to remain. Labour ministers now claim that a fully elected second house is impossible because it would clash with the Commons and the whole question has been left to a royal commission. The likelihood of any change in this parliament is becoming more remote and Labour's policy, far from being radical or threatening the status quo, 'is open to the accusation that what is proposed is a giant quango in the sense that all members will be appointed'.32

A similar fate has befallen the campaigns for a change in the voting system to a form of proportional representation (PR). This is an issue which deeply divides the Labour Party right up to cabinet level. Several of the most powerful ministers such as Gordon Brown and Jack Straw are opposed to any change in the electoral system. Blair is claiming that he has not made up his mind on the issue; but his appointment of the Liberal peer Lord Jenkins to head the 'independent' commission on what form the new voting system should take gives some idea of his real sympathies. The Jenkins commission which reported in October 1998 recommended the 'alternative vote plus' system of PR, a system which would benefit the Liberal Democrats probably more than any other party. Indeed, the various forms of PR being implemented already in Scotland and Wales and proposed for the Westminster parliament are all aimed at strengthening the centre parties (and the Tory party which has no seats in Scotland and Wales) rather than allowing real minority voices. Electoral reform is therefore central to the policies of the Liberal Democrats but many Labour MPs have greater doubts. The Welsh Office minister Peter Hain has come out publicly against the Jenkins proposals, saying that only the alternative vote should be implemented without the 'plus' element of MPs elected by a top up system across the regions, which should be delayed for ten years. 'I...doubt whether MPs would vote themselves out of their seats just like that,' said Hain.33 Although there are many who support various forms of PR on the basis that there would be MPs from all main parties sitting in every area, and who therefore see it as enhancing democracy, the proposals on offer seem likely to strengthen the centre based coalition politics of which Blair is so fond.34 He knows that he is in a minority on this question inside his party and that it can become one of Labour's major divisions-—in a way which, so far, economic policy has not been-—and therefore the referendum on voting reform has again been pushed into a second term.

There must be ruling class worries about the piecemeal way in which Blair is approaching reform. The deal with the Tories over the hereditary peers meant that the reformed second chamber suddenly became a much more immediate prospect, but without any real thought about the political or constitutional implications. This is an example of how Blair is casually restructuring the state in ways which can create all sorts of problems of coherence and co-ordination.

Tony's friends

When considering the factors which have led to the growth in cynicism about Blair's government, it is impossible to ignore the individuals chosen by him to help implement his policies. Blair's appointees and their behaviour speak volumes about the values and priorities of the government and of Blair himself. Despite the fine talk of May 1997, the Labour government has been noted for a level of high living, sleaze and corruption affecting Labour ministers in the way which has been traditionally true of the Tories. In addition, an astonishing number of those hostile to traditional Labour values have been rewarded with often highly lucrative posts in and around government.

By far the most serious case of sleaze involved that of the two ministers forced to resign at Christmas 1998. Peter Mandelson had received a secret loan of £373,000 from another minister, the Paymaster General Geoffrey Robinson. The loan had been kept secret, allegedly even from Blair, until it was leaked to The Guardian newspaper. Mandelson rapidly resigned when the press turned against him. The implications of the case were clear to Labour supporters. Mandelson is the architect of the whole New Labour project, was the closest to Blair in the cabinet (to which he was only promoted last summer), and was the most keen to cultivate new friends among the rich, powerful and right wing—-these ranged from Rupert Murdoch's daughter Elisabeth to Camilla Parker Bowles and Carla Powell, the right wing Tory socialite. It was to entertain such people that he used the loan to buy himself a half million pound house in London's Notting Hill.

As a consequence of these qualities, Mandelson is the most hated man inside the Labour Party. He failed to win a place on Labour's National Executive Committee (NEC) in 1997, despite Blair's backing, and was instead beaten by the left winger Ken Livingstone. When it was suggested soon after his resignation that he would return to cabinet within the current parliament there was uproar in the Parliamentary Labour Party. There has still been no adequate explanation of how Mandelson has financed his expensive lifestyle on an MP's salary.

His departure is damaging for Blair who relied on him as a loyal and determined ally. His departure also raises further questions of sleaze. The most serious previous allegation was about the Formula One racing boss Bernie Ecclestone, who donated £1 million to Labour before the election and was coincidentally exempted from the ban on tobacco advertising. Other notorious cases of New Labour's dubious connections include that of Derek Draper, the lobbyist and friend of Mandelson who boasted of his unique access to government: 'There are 17 people who count. To say that I am intimate with every one of them is the understatement of the century'.35 Draper has since been publicly shunned by his former intimates, although he is confident enough to appear in the media. Others have been more fortunate. Tim Allan, former Blair press adviser in Downing Street, is now a boss of Murdoch's BSkyB. Benjamin Wegg-Prosser, adviser to Peter Mandelson, rapidly found new employment as assistant to the editor of Murdoch's Sun.

It is hardly news that Blair is friendly to big business. Long before the election he said:

I think one of the great changes that has happened in the whole Labour culture is to recognise that we need entrepreneurs and people who are going to go out and be wealth creators and who are going to become wealthy by their own efforts. I support that, I want that, a successful economy needs that.36

But the scale of businessmen's involvement in government and its entourage and Blair's sheer enthusiasm for businessmen surprised many people. Far from these people showing entrepreneurship or obtaining effective results, several of the most prominent have been dismal failures. Many of them have also become tarnished. Geoffrey Robinson, a multi-millionaire businessman who was supposed to bring his acumen to government, has been forced out of office by the Mandelson loan scandal, but was already subject to other sleaze allegations. Martin Taylor, brought in as a government adviser on low pay and benefits, was last year forced out as head of Barclays Bank. Bob Ayling, boss of British Airways and a Blairite, is under increasing criticism over BA's loss of market share and for his abortive attack on workers who went on strike in the summer of 1997. Richard Branson, filmed with Blair just before the election on a Virgin train, has presided over an ever worsening train service and a similar decline in his reputation.

It is also noticeable how many Tories have gained jobs through Blair's appointments, from David Mellor to Lord Wakeham. But the most revealing of Blair's new found friends, however, lie within the ranks of his advisers and policymakers-—where former members of the Social Democratic Party and the Liberal Party have found a new and comfortable home advising New Labour. These include Roger Liddle, founder member of the SDP and friend of Peter Mandelson (co-authoring The Blair Revolution). Liddle is an adviser to Blair on Europe and defence. Former SDP founder member Derek Scott advises Blair on economics at 10 Downing Street; former Liberal Democrat councillor and parliamentary candidate Andrew Adonis is also at Number Ten advising Blair on education. Liddle's wife, Caroline Thomson, is the daughter of Liberal peer Lord Thomson of Monifieth, a former Labour cabinet minister. She is also the former PA to Lord Jenkins of Hillhead, founder of the SDP and now a Liberal Democrat peer.

There are further connections between several of these individuals and the disgraced lobbyist Derek Draper through the lobbying consultant GPC Market Access (formerly Prima Europe). Prima Europe was founded by SDP founder Lord Taverne, chaired by former SDP founder Sir Ian Wrigglesworth and directed by Roger Liddle. Draper himself became a director of the company, pocketing £250,000 when it was bought out by GPC. Mandelson was a former consultant to Prima Europe.37

The SDP was constituted in 1981 with the express purpose of wrecking the Labour Party. Labour's especially disastrous vote in the 1983 election occurred because the SDP split the vote of traditional Labour supporters. The effect was Thatcher's continued rule throughout the 1980s on a minority of the vote. Despite the SDP talking about 'breaking the mould' and 'new' politics, as Labour recovered politically it collapsed, merging into the Liberal Democrats. It is a final irony that many of its luminaries seem to be some of those closest to Tony Blair politically, and that they have more influence on government than they could ever have done under their own banner. The same is true of the Liberal Democrats. The party's share of the vote fell in 1997 for the third election in a row: 'at 17.2 percent it was the party's second worst performance since it started fighting elections on a nationwide basis in February 1974'.38

This has not stopped Tony Blair urging closer links with the Liberal Democrats. Indeed, it has emerged that Blair was ready to offer Paddy Ashdown and other Liberal Democrats seats in the cabinet; he was only prevented from doing so by the scale of Labour's landslide which made it politically impossible for him to pursue any type of coalition. Following the announcement of his resignation in January this year, Ashdown revealed that Blair was ready to do a deal: 'a closer election [result] would have made it more possible'.39 Peter Mandelson's close friend, the millionaire author Robert Harris, who spent election night with Blair, confirmed this when he said, 'It does appear to have been Mr Blair's intention, on the eve of Labour's election victory, to offer Mr Ashdown a cabinet seat; and it does appear to have been Mr Ashdown's intention, on the morning after, following a hasty consultation with his senior colleagues, to accept it'.40

If the political realities of 2 May 1997 prevented Blair and Ashdown from taking this step, Blair has remained a fervent advocate of closer links and possible unity between the two parties. Speaking to the Labour Party conference only months after his landslide victory, he made clear that not only did he want to continue his courtship of the Liberal Democrats, but that he rejected the very basis on which the Labour Party was formed at the beginning of the 20th century. When Blair listed his heroes in his conference speech, he stressed:

[they] aren't just Ernie Bevin, Nye Bevan and Attlee. They are also Keynes, Beveridge, Lloyd George. Division among radicals almost 100 years ago resulted in a 20th century dominated by Conservatives. I want the 21st century to be the century of the radicals.41

There is little wonder that this approach is so isolated inside the Labour Party. Labour's roots as a party which would represent the trade unions-—or rather the trade union bureaucracy—-in parliament developed from a rejection of the Liberal Party (traditionally looked to by many workers in the second half of the 19th century) as simply being a bosses' party. The whole history of the struggle for working people's representation in parliament and the eventual election of the first Labour government in 1924 was one of rejection of coalition with the Liberals. Even when Ramsay MacDonald and Keir Hardie did make an election deal with the Liberals, they were forced to do so secretly.42 For Blair to want to return to open alliances with the Liberals as part of his 'project' is effectively to wipe out any independent history of Labour throughout the 20th century—-something which even many right wing Labour politicians cannot stomach.

Blair's isolation following the demise of Mandelson and Ashdown has been reinforced by the obviously strong reaction to further links with the Liberal Democrats inside the Parliamentary Labour Party and the cabinet itself. While Ashdown claimed that the Liberal Democrats would be in government after the next election, this was rebutted by the deputy prime minister John Prescott when he said, 'I don't think I need anybody else... The Labour Party carrying out its promises with a majority of 170 can well do that'.43 Minutes of an internal Labour Party meeting between Blair and six representatives of the Parliamentary Labour Party in early January revealed that he was subject to a stormy attack because of failure to consult over closer Lib-Lab co-operation. Blair was forced to admit that 'if there were ever any plans to extend the nature of the relationship into new territory, he would discuss these matters first with colleagues'.44 There is clearly a split over these issues at the top of the Labour Party between Blair and his acolytes who want to destroy Labour and replace it with a party incorporating the mainstream Liberal Democrats and right wing Labourites, and the majority of the cabinet, who may accept modernising policies but who are still Labourist politically. This line up is potentially highly destabilising.

It is hard to see where Blair is going over his planned closer links with the Liberal Democrats. He has lost his main ally in the cabinet, Mandelson; the Liberal Democrats' new leader after Ashdown is likely to be less amenable; there is widespread opposition among the grassroots of both parties to closer ties. Elections this year are likely to sharpen divisions between the parties. Finally there is no objective necessity with such a huge Labour majority. Therefore Blair's hands are likely to be tied until the next election. This puts a hole in his 'project' of moving to the centre ground in politics. It is unnecessary to fully agree with the ultra-Blairite Robert Harris who says 'it may well be the greatest mistake of Tony Blair's premiership—-maybe even his entire career-—will turn out to be his failure to keep his nerve and make Paddy Ashdown a member of his cabinet two years ago',45 to accept that Blair's isolation in this respect is a bitter blow to him and serves to increasingly demonstrate how little support he has for these policies within his own party.

A further recent speech by Ashdown shed more light on Blair's intentions when Ashdown claimed that the prime minister's secret ambition was to see Labour split in two with left wing MPs breaking away to form their own party. Ashdown said that under the existing voting system 'a breakaway of the left is not impossible. They could be pushed into it, for Mr Blair would not miss them. But it could only come from desperation as it would be electorally doomed.' On the other hand, under PR the left would have a better electoral chance and so would split. 'New Labour would be liberated and the left would have a voice again. No more internal appeasement, no more loveless marriage'.46 This is no doubt the authentic voice of Blair's 'project' but one which will have little resonance among Labour MPs or the wider membership, and shows how far Blair's interests diverge from mainstream Labour.

Where's the opposition?

Blair's political isolation from his party is in many ways quite marked. Very few leading Labour Party members subscribe to the 'project', and on the ground among Labour activists it has even less support. The New Labour ideologues are very small in number: they comprise the large number of Blair advisers, a minority of MPs, especially concentrated among the new intake, councillors in areas such as the London boroughs of Lambeth and Islington who are implementing major attacks on local people (and whose unpopularity denotes the massive class polarisation in these and similar boroughs), and the substantial penumbra of Westminster, Whitehall and Millbank lobbyists, advisers and researchers. The bulk of Labour MPs and activists have welcomed Blair as the first successful leader for decades, but would probably be happier with more 'Old Labour' policies and less rabid commitment to the market. Yet it is remarkable how little opposition there is to Labour from within its ranks or within the trade union leadership.

Firstly, there is the weakness of Old Labour itself. Its ethos is identified most strongly with the 1945-1951 Labour governments. At least for the first three years of that government Labour did deliver substantial reforms. This was the era of the NHS, established in 1948 despite opposition; the welfare state, which brought in a range of benefits for the old, sick and unemployed; and the nationalisation of key industries such as coal and rail, already under government control in wartime. The radical impetus of the war led to the Labour victory in 1945 and a sense that much had to change—-there could be no return to the days of unemployment in the 1930s. Even during this government, however, change was very slow and often the government backed down before vested interests. So, for example, the government backed down when blocked by the House of Lords over the abolition of capital punishment, despite a narrow Commons majority.47 And the plans for building a new society were thwarted, abandoned and curtailed as the government went on. So a survey of building on new London housing estates carried out in 1952 showed that only one nursery school out of a planned 46 had been built, only six infant welfare clinics out of a planned 26 and no health centres out of a planned 33 had been built.48

Nonetheless, most Labour voters believed that great changes were being achieved. Labour's 1945 manifesto said, 'The Labour Party is a socialist party, and proud of it', although it warned that 'socialism cannot come overnight, as the product of a weekend revolution'.49 Labour supporters believed that their path to reform was on course and they were part of a mass party. Although the Labour government effectively ran out of steam by the late 1940s, and 13 years of Tory rule began in 1951 (despite Labour winning more votes in that election), the 1945 government ushered in an era of consensus politics, made possible by the expansion of the economy during the long boom of the 1950s and early 1960s. Harold Wilson's governments from 1964 to 1970 were much weaker in terms of reform than the 1945 government. However, they did preside over various changes in the law on employment such as equal pay for women. They also allowed parliamentary time for private member's bills such as the legalisation of abortion and homosexuality which brought substantial advances. There was race relations legislation, although this was extremely weak.

However, the limited reforms available to Labour in a boom were running out, as the Wilson government faced economic slowdown and industrial unrest. The nadir of Old Labour came in 1976 under James Callaghan when Labour abandoned any pretence at maintaining the post-war consensus in the face of economic crisis. The IMF demanded huge cuts in response to a bailout for the falling pound. As Gregory Elliott says, 'The day the pound nearly died portended the day British post-war social democracy, already terminally ill, did die—-by its own hand'.50 Anthony Crosland, leading right wing intellectual of post-war Labourism, was moved to say, 'Even if the government survives, does it make such a difference if Labour measures can't be implemented?'51

Since then the demise of Old Labour has accompanied the demise of all it stood for; it has made repeated and regular concessions and capitulations to Thatcherism and now to Blairism on the ground that the only important question was getting a Labour government elected. It now accepts privatisation, attacks on welfare and high levels of unemployment-—exactly the reverse of what it once believed. Yet this desperation to make concessions to the right has only led to further concessions and to widespread demoralisation among Old Labour supporters. It is this which contributes to the crisis of Labourism at the grassroots. While Old Labour MPs take seats in the House of Lords, those in the Old Labour heartlands who have spent time, sometimes decades, canvassing and working for the Labour Party now find themselves marginalised and ignored by the government for which they spent 18 years waiting. This is why the crisis of Labourism is at its most acute in those Old Labour areas such as south Wales, central Scotland, the north of England and inner London, and why many Labour supporters now find themselves pushed to the left.

Yet the left has not been immune from the crisis. The Labour left has never been weaker than it is now. The series of witch hunts, defeats and retreats which marked the 1980s and early 1990s under the leadership first of Neil Kinnock and then John Smith were continued under Blair. The abolition of Clause Four of the party's constitution, which contained the commitment to nationalisation, provoked little opposition. The emasculation of the left's traditional strongholds, such as the annual conference and the National Executive Committee, has occurred with little organised resistance. Local government, the stronghold of the Bennite Labour left, has been progressively weakened by legal and financial restrictions under the Tories, which are being continued under Labour. This is a policy which in effect amounts to ratecapping and includes further government and private sector intervention in areas such as education. Labour's left has been dramatically weakened organisationally. However, it has also been weakened politically and ideologically. The basis of Labour's traditional ideology was that a mixed economy with high public spending and government intervention was the most effective way of winning change and creating a fairer society with full employment and a decent welfare system. The failure of old style social democracy led to an increasing embrace of the market under successive leaders which reached its peak with Blair. However critical most Labour Party members might be of this strategy, they see no alternative. They accept the logic of electoralism which means they will agree to compromise and retreat in order to win. They argue that this then allows them to make real changes when in power. But of course being in power only leads to further retreat—-in the name of electoralism. So today even many left wingers accept the need for private investment in areas such as public transport or health. When the arch-Blairite minister (and former Labour left councillor) Stephen Byers said in February that the most important thing was not wealth redistribution but wealth creation, many Labour MPs grumbled, but there was no open attack on him. The demise of the East European regimes and the collapse of the Communist Party has also had an effect, since the Labour left historically has relied heavily on the CP for its ideas. The collapse of state 'socialism' left many former Communists and Labour lefts turning towards an acceptance of the market and, therefore, many of Blair's concepts. As Paul Anderson and Nyta Mann have pointed out:

The parliamentary left's organisational weakness is not, however, its only problem or its biggest one. For some years, it has lacked anything like the confidence, drive or sense of direction of the Labour modernisers. The disagreements over tactics that were the original cause of the Tribune-Campaign split have been overlaid by deeper differences as the parliamentary left has grappled with—-or failed to grapple with-—the myriad economic, political and social changes since the early 1980s... There is no agreed left position in the PLP today on the economy, Europe, constitutional reform (particularly the electoral system), the future of the welfare state, and much else besides. Insofar as the parliamentary left has found unity of purpose in recent years, it has been in fighting unsuccessful rearguard actions against changes initiated by the party leadership—-on public ownership, on defence, on the closed shop, on OMOV, on Clause Four.52

The outcome of this is that the criticism from Labour's left is often inaudible, and usually makes big concessions to Blairism. Stalwarts of Old Labour such as Roy Hattersley, former deputy leader and always firmly on the right of the party, are now some of the boldest critics of Blair (at least in the columns of The Guardian), while many erstwhile Bennites have made their peace with Blair. Dawn Primarolo, one of Tony Benn's main supporters in Bristol and a poll tax non-payer as late as 1990, is now Paymaster General attached to the Treasury, and a full supporter of the Blair project. She said recently, 'I feel I've matured. I've been an MP for 11 years... I've learned a lot. And also the political agenda's moved on'.53 Other ministers have a similar approach. Robin Cook, once regarded as a leader of the left, now carries out Britain's foreign policy, such as the bombing of Iraq, with apparent enthusiasm. He denies that he ever used the term 'ethical foreign policy' but refers rather to 'an ethical dimension' to foreign policy.54 Traditional left wingers who are excluded from government office, such as Dennis Skinner or Tony Benn, are treated as mavericks or dinosaurs, allowed a certain degree of freedom to speak out because no one dares challenge them, but also dismissed as irrelevant. In any case they remain individuals with little power to influence events. The left in parliament is probably weaker than ever. Although some of this is due to the increasingly Blairite intake of MPs, it is also due to the left's political weakness. After 1997 only six new MPs out of a total of 183 new Labour MPs joined the left wing Campaign Group.55 The former leading lights of the Tribune Group such as Peter Hain are now in government. One of the most favoured platforms for left MPs, the NEC, has now been denied them, since MPs on the committee are no longer elected by the membership but appointed by Blair. The main opposition has come from the Grassroots Alliance, several of whose members, including Liz Davies and Tribune editor Mark Seddon, beat the Blairite slate to win places on the NEC under the new rules in 1998. However, since then their opposition has been muted and constitutional in its approach.

In London Ken Livingstone is campaigning to run for mayor despite the bitter opposition of Blair. He is obviously banking on things going so badly for Labour in areas such as Scotland and Wales that the leadership may be faced with no alternative than to let him stand. Yet this has led him into a campaign which is confused and contradictory and where he has hesitated in putting forward really radical policies. Livingstone has repeatedly made concessions to Blair including the following in October 1997:

I haven't written off Blair and I don't think the left should. There are a lot of truly ghastly people gathered around Blair, like lice on the back of a hedgehog and they have their own agenda... They seem to regret being born in Britain because they would rather be working in the White House in Washington. Now we have nothing in common with these people. But Blair is different. When Blair became active in the Labour Party he was broadly in line with the consensus at the time.

Livingstone's analysis went further; the extremes of the left at the time were to blame for Blair's right wing development. In particular Tony Benn's speech to the 1980 Labour Party conference 'marked Benn out as too far to the left for many who had been sympathetic to him. So it cut him off from a constituency of genuine radicals'.56 This appealing to Blair has not so far done Livingstone any good. He has been blocked from standing as mayor on the grounds that it is better to weather an argument now and prevent him from winning such a prestigious position than allow him to win and then be faced with permanent opposition in London. Livingstone has repeatedly tried to assuage the Blairites' fears, most cravenly in a Guardian article where he offered to accept Blairite Trevor Philips as his deputy, to work with the government and to accept party control of the campaign.57 This again received the predicted response and Livingstone has now launched a public campaign in favour of his candidacy for mayor, with backing from London Labour MP Diane Abbott, Billy Bragg, Jo Brand and other celebrities. A February meeting in London to launch his campaign attracted 1,000 people at short notice and during a tube strike. Even this campaign is described by Livingstone as 'aimed at changing the one vote that matters, which is Tony Blair's'.58 The problem is that he reduces the idea of campaigning for a left wing candidate to one of manoeuvre, rather than basing it on rank and file support for the left wing policies which are marginalised under Blair. In addition, Livingstone is fairly typical of a new generation of left MPs who both reject the earlier radicalism of the hard left while presenting themselves as providing a slightly more left wing critique, especially of the economy, than Blair and Brown.59 All this leads to a tacit acceptance of many of the fundamentals of Blairism and to a shared assumption that the old left is finished as a force and that compromise is the only way forward.

However, it would be wrong to deduce from the present weakness of the Labour left that it cannot regain its influence. Indeed, Blair's right wing politics open up a space for the left which can only grow as long as his policies continue on their present course. The Livingstone campaign in London is one obvious focus where it can grow, but will also do so around the issues facing Scottish and Welsh politics, around future industrial struggles, cuts campaigns and around a range of politics where discontent with Blair has come to the surface. In such situations, even a politically very weak left can suddenly find that it is attractive to large numbers of people looking for an alternative to Blairism. Already we can see that figures like Livingstone are supported because they are identified with a much more left wing politics than are currently on offer from mainstream Labour. Any big upsurge in struggle will see a much bigger audience for the left, and the Labour left will grow as a consequence. At the same time, its political compromises with Blairism, its organisational weakness and its lack of any real roots inside the working class, plus its lack of a coherent ideological voice, mean that it will find it more difficult to consolidate that support than has been the case in the past.

Those who expected a stronger opposition to Blair from the trade union leaders have been disappointed. In practice they have acquiesced to most of Blair's policies even though the unions have received very little in return for bankrolling much of the election campaign and for their loyal support for Labour. Despite spending £12 million in donations to Labour in 1996-1997 and providing 9,000 helpers in the election campaign, the unions have been shunned.60 It is an open secret that the TUC leaders and the various heads of unions feel betrayed and outcast by Downing Street. Far from receiving favours from Labour, they are forced to stand by while the big bosses, many of them anti-union, have the ear of Tony Blair. On crucial union questions such as the minimum wage and the Fairness at Work legislation, agreement has been reached as a compromise between bosses and unions, only for Labour to renege on the deal and give into further lobbying from the bosses. Far from this leading to the unions taking a harder stand against Blair, it has made the leaders pathetically grateful for any crumbs they are given.61

Response to the attacks on unions as a body, especially the successive concessions to employers under the Fairness at Work legislation (even that title was abandoned when the bill was published) have been muted, with union leaders stressing positive aspects of the legislation such as slight improvements in maternity leave. Attacks on public sector pay are much disliked by the union leaders but they are terrified of leading a serious confrontation with the government. In fact, whatever the deep divisions between the Blairites in particular and the trade union leaders, the two need one another. The union leaders need a party from which they can win some concessions, however few or pathetic these might appear; in reality Blair is forced to rely on the unions for the block vote which has swung behind his changes time and again and for helping to sell Labour's policies to union members. The head of the GMB, John Edmonds, made a revealing comment about the relationship: 'Our 50 percent vote [at the party conference] is still a powerful weapon and no one should underestimate its usefulness to the leadership. We work out an unwritten code, if you like, that we underplay our power and that our first instinct is to support the leadership. We know the damage caused by divisions'.62

However, even the most docile trade union leaders feel themselves pushed to the limit by this government. They are constantly ignored or humiliated by those in positions of power. At the same time their members on the ground are increasingly restless. They make up a large proportion of Labour activists; during the 1997 election they were used to knock on doors to win votes for Blair; they have been left empty handed by this government. In addition, life at work is extremely hard, with pressure from employers over jobs and conditions. Public sector workers, having put up with years of Tory cuts, are finding no improvement and sometimes a worsening of conditions under the Labour government. Private sector workers feel increasingly insecure as the government refuses to intervene to stop employers from their worst excesses. No wonder that dissent is growing. Perhaps an interesting straw in the wind is a letter sent from Tony Dubbins, general secretary of the printers' GPMU union, to all the union's branches, which deals with requests from local Labour Parties for financial assistance in this year's Welsh, Scottish and European elections. Dated December, part of it reads:

...the union has been deeply involved in consultations with the party with the 'Fairness at Work' proposals, and we expect them to be published in the near future. It is our intention to hold a meeting of branch officers to discuss the proposals as soon as possible after their publication. To this end I am strongly recommending branches that they should make no financial contributions to the Labour Party for election purposes until such time as we see the shape of those proposals, and the branch officers' meeting has taken place.63

Similarly, anger in the Fire Brigades Union (FBU) has surfaced in proposed resolutions to the union's annual conference, several of which called for disaffiliation from Labour. Bedfordshire FBU demanded that 'the FBU immediately disaffiliates from the national Labour Party in reprisal for the betrayal by New Labour leaders of their union roots.' Tyne and Wear demanded a withdrawal of support for councillors on Labour controlled fire authorities 'who have been actively involved in campaigns to attack and erode conditions of service of FBU members'. From Mid and West Wales the resolution argued that 'the Labour Party no longer represents working class aspirations and has abandoned all pretences of being a socialist alternative...this union should withdraw its financial support for Labour until such time as it returns to its socialist ideals'.64 While these resolutions have been ruled out of order because they require rule changes in the union, and so will not be debated at the conference, they indicate a level of protest at Labour's actions and a refusal to continue supporting the party uncritically. It is obvious that the discontent at shopfloor and bureaucratic level in the unions is growing and that, although Blair has relied and will continue to rely heavily on union support while pretending that he doesn't, the tensions are growing and may well erupt in unpredictable ways.

What is the alternative?

It is a major paradox that nearly two years into a Labour government there is widespread discontent with Blair and with New Labour but this is not matched by any rise in the level of struggle. The number of strikes is very low; even very obvious discontent such as that over nurses' and teachers' pay does not immediately result in industrial action. There appears to be little political opposition to Blair. Opinion polls show him with a high rating, there is little opposition within parliament, and very little that occurs outside parliament is reported. In the self referential world which New Labour inhabits, businessmen pay tribute to the government and it is still lauded by most of the people at the top of society. The right wing media might be turning against Blair, but there is so much about him that they admire that their criticism is still muted. Anyway, the Tory party is so deeply divided internally and so despised by millions throughout the country that few see a viable electoral alternative (apart from the nationalists in Scotland and Wales). It is therefore easy for Blair to pose as a one nation leader, to echo John Major in claiming that the vast majority are becoming middle class and that within a few years everyone who is now socially excluded will be able to climb the ladder of opportunity to an expanded middle class:

Slowly but surely the old establishment is being replaced by a new, larger, more meritocratic middle class...characterised by greater tolerance of difference, greater ambition to succeed, greater opportunities to earn a decent living. A middle class that will include millions of people who traditionally may see themselves as working class, but whose ambitions are far broader than those of their parents and grandparents.65

Yet the reality is exactly the other way round. Many groups who may have thought of themselves as middle class—-such as teachers and nurses, bank clerks, even some college lecturers, are seeing their wages and conditions being pushed down towards the working class. The idea that they or their parents failed to become middle class because of lack of ambition is also wide of the mark. Most people are destined to do jobs which are relatively low paid, increasingly insecure and dominated by speed up, supervision and other features of traditional working class life. Many of these jobs are characterised by relatively high skills coupled with intense work and often long hours-—exactly the formula which is supposed to transport workers into the middle class but which in practice still leaves millions in low paid routine work. No wonder that the majority of people see themselves as working class: in 1997 around 60 percent did so, whereas around 35 percent saw themselves as middle class. Despite the idea that society is becoming much more middle class and that the working class is shrinking, these attitudes have changed little over the past 30 years. The percentage categorising themselves as middle class rose only 5.5 percent between 1966 and 1997.66
Blair ascribes his election victory in 1997 to appealing to the professional and managerial middle classes. These are the sorts of people he goes out of his way to cultivate. But in reality his electoral success did not come from these people, but through winning the votes of groups who increasingly see themselves as routine workers, often white collar and skilled, often members of trade unions (whose overall decline among manual workers, as jobs in areas such as mining have disappeared, has been partly offset by a growth in white collar unions). Labour made particular advances among what are classified as C1s, who include low level supervisors and managers but are also made up of clerical workers. Whereas 47 percent of this group voted Labour (an increase of 19 percent), only 31 percent of ABs (managerial and professionals) did. This last group still composed the largest single area of support for the Tories at 42 percent.67 This reinforces an Institute of Directors poll taken shortly before the election which showed that managers were intending to vote 40 percent Tory and only 25 percent Labour.68 More detailed polls before the election showed that 60 percent of teachers intended to vote Labour and only about 15 percent Tory. This contrasted with 50 percent backing the Tories in 1979, compared with 32 percent for Labour. Similarly with nurses, a Nursing Times survey showed that 70 percent planned to vote Labour against only 16 percent Tory. Given that nurses and teachers are classified as AB groups 'the change in their votes alone would account for nearly half the growth in the Labour vote in this grouping'.69

Among Labour Party members there is apparently little support for Blairite or anti-working class policies. Majorities questioned in 1997 wanted more money in the NHS, less spent on defence, and some income and wealth distribution towards working people.70 A recent MORI poll showed that approval of big business was at a 30 year low. Whereas in 1970, 53 percent agreed that the profits of large British companies helped make things better for everyone who buys their goods and services, by 1999 only 25 percent believed this, with 52 percent against-—an almost total reversal.71

It is no wonder that within months discontent began to grow with the Blair government among its traditional supporters. Few could have predicted that this discontent would be sharpest among Labour activists and its traditional supporters in the unions. Yet this is what has happened. Much of the evidence is anecdotal, but it is widespread. In many parts of the country Labour activists have left the party or slumped into inactivity, usually through demoralisation at having to defend Blair's policies or at being taken for granted by a New Labour machine which assumes votes in strong Labour areas will always be there. This has been posed most acutely in Scotland and Wales, where the run up to the devolved elections has led to defections and disillusion. But that mood exists everywhere. A number of people have left over new policies: attacks on single parents and disability benefit; tuition fees for students; the bombing of Iraq. Letters in The Guardian repeatedly testify to the public renunciation of Labour. Some of those leaving are very much Old Labour but many must be some of the 140,000 who joined between 1994 and 1997. Labour Party membership has fallen over the past year. In one Liverpool council ward, where one of the three councillors is up for re-election in May and some fear losing to the Liberal Democrats, several constituency activists resigned over the bombing of the Gulf. Morale is low and activists are often not informed of public meetings held by their MP. Elsewhere in the city, in the Halewood ward, the branch chair resigned at Christmas over the bombing of Iraq. In Birkenhead ward meetings are very small and few are willing to take on responsibility.72 In Bristol the chair of one Labour Party ward resigned after 15 years in the party. A former mayor of one West Country city has recently resigned from the party; in another town in Wiltshire the convenor of a factory is not standing again as a local Labour councillor. Bristol University Labour Students found themselves split over the bombing in the Gulf.73 There are similar stories from around the country. A longstanding Labour Party member in Cheshire wrote an article for Socialist Review last December in which he argued:

Blairism is conservative. It is also dishonest. Blairism won an election in the name of Labour, on the back of the two centuries of working class struggle that created the Labour movement and with the help and the subs of party members who believed they were getting a genuine Labour Party elected. Once in power it has revealed itself to be something quite different. Not just broken promises but the repudiation of the very soul and aspirations of the historic labour movement.74

Michael Knowles's conclusion was to leave Labour. He speaks for thousands who may or may not take the final step but who are so disillusioned that they are not motivated to go out and canvass, let alone enthuse about the government.

So Labour members who used to be active in most working class localities defending Labour policies, getting people to join, turning out the vote, are now often sitting on their hands. In south Wales there have been a number of meetings of Labour members around the contest for leadership and the Welsh Assembly. At all of them a sizeable number were interested in socialist ideas, were willing to buy socialist papers and so on. Labour's landslide in 1997 depended on the enthusiasm of Labour supporters to carry it through: 'A quarter of Labour voters reported [to MORI] that they encouraged others to support their party: only one-tenth of Conservative supporters did so, and whereas 12 percent of Labour supporters actively discouraged people from voting Conservative, only 3 percent of Conservatives took a similar anti-Labour stance'.75 Blair has lost this enthusiastic support among many of his activists. There is also some evidence that newer Labour members who joined after Blair became leader are less active than older members; loss of support from the traditional activists is therefore a very serious problem for Blair.76

However, it is a much bigger problem for those who have traditionally looked to Labour and now feel betrayed. They have put up with repeated assaults on left wing policies, of accepting cuts and job losses in the name of achieving change, only to see their party run and influenced by some of the richest, least accountable people in British society. Blair has no feeling or empathy for their concerns and he is contemptuous of their values. The result is a crisis of Labourism as it has been constituted in Britain since the Second World War. Labour is not even committed to the very limited provision of public services and welfare that it was once. The process did not start with Blair, but with the 1970s Labour governments which back-tracked on commitments in the face of the first serious economic crisis since the war. But Blair has taken the project much further, with his open rejection of Labour values and his espousal of 19th century Liberalism. Many Labour members who have devoted their lives to political change through Labour see little alternative, but a growing number are realising that this is the end of the reform road. The cadre of the Labour left, especially the MPs such as Livingstone, are desperate to keep the activists inside the Labour Party, yet the more they compromise with Blair the harder it makes the creation of a left wing pole of attraction.

The defeats of the 1980s still mark the working class movement and still mean that employers are relatively confident, and organised workers often feel demoralised and unable to really bring about change. Blair has found better friends than he has deserved among the trade union leaders, who have repeatedly argued that nothing can be done to alter policy apart from quiet behind the scenes lobbying-—which has been a total failure. His friends among former left wingers have also been invaluable in selling the various retreats over policy. However, while Labour members were willing to put up with a great deal to win a Labour government, there are fewer reserves of patience left, and even fewer reserves of loyalty to Blair. His failure to win the hearts and minds of Labour members in Wales and London is indicative of the shallowness of his support. So far, Labour has managed to keep the lid on opposition, but the nature of New Labour means there are few barometers to indicate the levels of discontent and the possibility of future explosions. These will also most certainly take Blair by surprise.

While the level of struggle has been much lower in Britain than in many other countries, there is no real evidence for British exceptionalism. The same mood of bitterness and anger which affects workers in Greece or Germany is also present here. The level of discontent is obviously growing, although the indications are still straws in the wind: the 500 workers from Brent who lobbied Downing Street over cuts; the public letters of resignation from Labour; the 82 percent vote for strike action against privatisation at UCLH and among Sheffield housing benefit workers; the sizeable demonstrations around Britain over the Gulf; the discontent exposed in union conferences; the protests over school and library closures; the joy at Peter Mandelson's departure. This is not simply confined to the Labour Party: many thousands are questioning the political and ideological assumptions which they have accepted for decades and are looking to a left alternative. Socialists are able to find an audience at two levels: through intervening in the small but important struggles against the ravages of the market and the compliance of Blairism, which are there even though they rarely make the headlines; and by providing some of the ideological arguments about the alternative to a society run in the interest of capital. It is increasingly obvious that even one major national strike or an all out strike in one city would lead to a rapid crisis of Blairism and Labourism as society polarised along class lines. But we do not need to sit passively waiting for such an event to occur. Instead we can begin to develop a theoretical and practical alternative to Labourism, old and new, which can point the way out of the chaos of the system.